GSY - The April CPI Report May Shock The Market And The Fed
2024-05-12 07:00:00 ET
Summary
- Hotter-than-expected inflation has put the Fed on a higher for longer policy path.
- The CPI has been rising consistently at roughly 3.5% since summer 2022, posing a disinflationary concern.
- The CPI has been on a linear upward trajectory for 19 months, with little deviation, suggesting a sustained trend.
It seems pretty clear at this point that the path for monetary policy is higher for longer. Odds for rate cuts have reduced from an unthinkable 7 in January to just 1 , with decent odds for 2. Listening to Fed speakers since the last FOMC rate decisions. They seem to be saying the same thing; given the lack of confidence in a disinflationary trend that started late last year, many members now say it will take longer to see cuts. Some even question whether the neutral rate is higher today or if the policy is restrictive enough....
The April CPI Report May Shock The Market And The Fed